Florida Court: Insurer Must Cover $15M Verdict Against Insured

An insurance company is liable to cover a $15 million trial verdict won by the mother of one victim of a horrific drunk driving crash in South Florida several years ago.

The insurer might have had a leg to stand on in its assertion that the claim isn’t covered, but because of its failure to comply with the Claims Administration Statute, F.S. 627.426, and did not give proper notice of its refusal to defend (based on the assertion defendant was not a named insured).

In fact, the insurer hired a defense lawyer to represent the defendant throughout the trial. It also failed to obtain a non-waiver agreement from defendant or retain an independent counsel mutually agreeable to both insurer and defendant.

According to court records from Florida’s Third District Court of Appeals, defendant was driving his mother’s vehicle, which was insured by GEICO. He just left a night club, where he had been drinking (as he later conceded to police). On Interstate 95, on the shoulder ahead of him, seven vehicles were stopped after a multiple vehicle accident. Some people were out of their vehicles, assessing the damage. Defendant slammed into the cluster of vehicles.

Five people were killed. Defendant driver was deemed to have a blood-alcohol level of 0.127 – well above the legal limit of 0.08.

One of those was the 23-year-old son of plaintiffs, who filed a lawsuit against defendant. By that time, however, defendant had absconded, most likely having fled the country. He still faces trial on five counts of DUI manslaughter.

When the parents first filed the wrongful death lawsuit, GEICO submitted a reservation of rights to deny coverage, indicating it would deny coverage because defendant was not an insured under the policy. After defendant absconded, GEICO sent another reservation of rights, citing defendant’s lack of cooperation with insurer’s investigation. A number of other reservation of rights letters were issued.

Nonetheless, the insurer represented defendant in court over several years. Plaintiffs ultimately won the case, with the jury awarding $15.3 million. Subsequently, insurer sought to decline coverage defense based on breach of cooperation.

However, this defense failed, according to both the trial court and later the appellate court, because the insurer did not comply with state law on claims administration. It did not send a refusal to defend letter to defendant by registered or certified mail. Instead, it defended him. Further, insurer did not obtain a non-waiver agreement from defendant or obtain an independent lawyer mutually agreeable to both sides because the insurer didn’t know defendant’s whereabouts.

Based on all this, the 3rd DCA ruled, the summary judgment against GEICO was proper and affirmed.

Auto insurance companies wield a lot of power when it comes to the which claims are paid out because they are the entity that writes the policy. That said, courts require that any language that is ambiguous be interpreted in favor of the insured. But that doesn’t mean they always win these cases.

Still, you can bet that if there are millions of dollars at stake, the insurer is going to put substantial resources into protecting their bottom line. You need an attorney who is prepared to go toe-to-toe with them. We can help.

Call Freeman Injury Law — 1-800-561-7777 for a free appointment to discuss your rights. Now serving Orlando, West Palm Beach, Port St. Lucie and Fort Lauderdale.